Opinion: The Bankrupt City Near You

Financial analyst Meredith Whitney on the problems she sees on the horizon for states. Photo: Associated Press

This transcript has been automatically generated and may not be 100% accurate.

... I ... back to Opinion Journal why Mary Kissel ... the fate of the States it's a new book it's out from Meredith Whitney the founder of Meredith advisory group in the ... end the author of this new book ... The Retail of twelve ... where he should move to worry should work and where you should just escape from as quickly as possible America's Creek and emotional piece ... on it how big is the gap between the California and Florida ... I think there's a really big gap because California and let them eat any tie Tuesday at California and a Texas because that's a close her ... aam juxtaposition of California has less money to spend on social services Texas has more money to spend on social services on California had built so many ... so much into government spends and relied so much on the expectation that home prices would never go down which of course they did on that California's ... structural mismanagement ... of in search of budget mismanagement is something that's can be the end it going to be incredibly dangerous to stay in this this get worse over time because the people who can move in California in the middle class they will forget this why should I pay ... fifty sixty percent of my income to these jokers in sacrament that's exactly right so the cost differential ... becomes RSL ... surely people will pay always wanna pay more to live on the coast and who doesn't love the Vista California but at what price straight so if you get to aam high level of taxes where stance on economic to live there anymore on top of the fact that the social services are declining but the cost of education for irritation California has doubled since two thousandsix race at him use in a California thing this great passion and preschool free service is free pizza and good times it's not that I ... get so there is no free lunch a bit effectively and ... so it you know what's focusing on Ana California and maybe I Group Illinois into this it is described as well as the states of really big fiscal problems ... um what I haven't we seen the defaults yet ... I'm in uni you talk to her a couple years ago by a wave of defaults what has allowed the States ... but to keep those ... skidding on ... while a second certain states and they haven't won sixty jeopardize their and Steve almond credit ... rating aam to allow ... certain these studies to buy so Pennsylvania's a perfect example of that ... of will see this month whether on to treat this bankrupt are not under five the five cities and ... in Michigan that under emergency measures situation ... I was in the free money from the Fed was it cheating the accounting rules and what was it that ... week that has allowed the states in his fiscal rules or they were talking billions of dollars here ... to stick to just keep keep going well they cut a lot of essential services for starters I'm ... still cutting programs cutting education cutting but you know I am public safety that's one thing is not funded It pensions adequately that's another thing and then she appointed issue really cheap debt so that I that's another thing you can also wear it but sometimes forget Eli's favorite check which it is a Elle's passes the buck deal pay all the bells they owe of on the first day of the next year's ... budget for the current ... season which like I could do that ... here we have the Texas Comptroller in due season comes and cheese and is the transparency needed because she said that ... its citizens of her state don't know ... when they're little municipality or or even the bigger cities ... are ensuring all this debt on the back of taxpayers so it is that the one of the solutions here that to just ... let people know that this is what that is the train is coming down the track pushing ... really hard on this issue you and I think that sound before I got into this CL foreigner half years ago I didn't even think about ... I didn't think that um I didn't think that the D was rating from me which is on the I know I overspend I have to deal with the bills the next day rate um but when the state ever stands I have to deal with their bills the next day and so the Ohio and I was dismissed at local politics not interested not to mention some finds on people's lawns running for patio at the ready for the Papas it matters so much because effectively they're going to be a deer running up the bar tab and we're stuck with the Dow it matter so much you should know about a she read the book Meredith Whitney fate of the state's thank so much for my show ...